Finance

Pedestrians pass in front of a GameStop retail store in New York, December 23, 2021.
Scott Mlyn | CNBC

Check out the companies making headlines in midday trading Thursday.
GameStop – Shares of video game retailer rose more than 7% after the company disclosed a new partnership with cryptocurrency exchange FTX in its quarterly update. GameStop plans to collaborate with FTX on e-commerce and online marketing initiatives. The increase in the stock price came even as GameStop reported a sales decline and widened losses for the most-recent quarter.

Rivian Automotive — Rivian shares popped nearly 11% after the electric-vehicle startup and Mercedes announced they were planning a joint venture to build electric commercial vans for both brands in Europe. Production for the vehicles will be done on a shared assembly line to reduce costs and will begin in a few years.
Advanced Micro Devices — Shares of the chip stock gained 4% following an upgrade from Stifel to a buy rating. The firm said Advanced Micro Devices’ stock could rally more than 50% going forward.
Asana – Asana shares surged 24% after the work management-focused software company beat analysts’ earnings and revenue estimates for the previous quarter. Asana posted a smaller-than-expected loss of 34 cents per share. Revenue came in at $134.9 million, compared to estimates of $127.2 million, according to Refinitiv. The company’s third-quarter revenue guidance was slightly ahead of estimates.
Regeneron — Regeneron’s stock rallied 18.9% after the pharmaceutical stock posted positive results from a trial for a potential eye drug.
Snap — Shares of the social media company jumped more than 9% after the Verge reported that CEO Evan Spiegel broke down a turnaround plan in an internal memo. Spiegel said the company aims to grow Snapchat’s user base by 30% to 450 million by the end of next year. He also said he expects to increase revenue to $6 billion in 2023. Snap recently laid off 20% of its workforce. 

Moderna — Moderna jumped 4.7% after Deutsche Bank upgraded the stock to buy, saying that a strong showing in the biotech company’s most recent quarter points to a buying opportunity.
American Eagle Outfitters — American Eagle Outfitters’ stock sank 8.7% after earnings fell short of analysts’ expectations in the recent quarter. Revenue fell in line with estimates although the retailer warned of increased promotions.
Dave & Buster’s — Shares dove 14% after earnings per share missed the Street’s second-quarter estimates. Revenue slightly beat expectations, however, and the company said its business has seen improvement in the early stages of the third quarter.
— CNBC’s Michelle Fox, Sarah Min, Tanaya Macheel and Yun Li contributed reporting.

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Coinbase is backing a lawsuit filed against the Treasury Department Thursday by six users of a recently sanctioned crypto service.
Treasury said the service helped launder billions from state-sponsored bad actors. But crypto enthusiasts argue that sanctioning crypto code is an overstep and could cause negative ripple effects in the tech industry.
“It sets a dangerous precedent,” Coinbase’s chief legal officer, Paul Grewal, tells CNBC.

Brian Armstrong, CEO and Co-Founder, Coinbase, speaks during the Milken Institute Global Conference on May 2, 2022. in Beverly Hills, California.
Patrick T. Fallon | AFP | Getty Images

Coinbase is footing the bill for a lawsuit filed against the Treasury Department Thursday by users of the recently sanctioned crypto service, Tornado Cash.
The six plaintiffs include Coinbase employees and other users of the mixing service that was blacklisted by the Treasury’s Office of Foreign Assets Control (OFAC) in August.

Mixing services like Tornado Cash are used to obfuscate crypto transactions, which while anonymous, are easily traceable. The Treasury Department argued this particular service was used to launder more than $7 billion worth of digital currency in the past three years by North Korean hackers and other bad actors.
But in some cases, mixing services are used for legitimate privacy reasons. One plaintiff, a senior security risk analyst at Coinbase, used the service to anonymize donations to Ukraine out of fear his address would be targeted by Russian hacking groups. Another had concerns about his family’s security.
“Each is an American who simply wants to engage in entirely lawful activity in private,” according to the lawsuit.
The sanctions were a unique move by Treasury to blacklist open source software, versus an entity or person. Crypto enthusiasts have argued that the move was an overstep, sets a new legal precedent and could cause negative ripple effects for the tech industry.
“We saw this as a much larger problem,” Coinbase’s chief legal officer, Paul Grewal, told CNBC. “It sets a dangerous precedent — if this code can be designated without any limits imposed by law, any technology any tool or system could be fair game.”

Grewal, former deputy general counsel at Facebook, said it could have a chilling effect on innovation. He likened the Tornado Cash scenario to police chasing armed robbers on a highway. In order to catch the criminals, “we wouldn’t ban all use of that highway.” Grewal said it was the first time Coinbase has financially supported an external lawsuit and plans to pay for the plaintiffs’ lawyers, as well as other costs associated with pursuing the claims in federal court.
Thursday’s suit argues that the move went a step beyond Treasury’s authority, and as Coinbase put it in a blog post uses “a hammer instead of a scalpel.” The plaintiffs argue it caused financial harm as their money is still locked on Tornado Cash, and hurt users relying on the tools for privacy reasons. The case asks the Court to remove Tornado Cash smart contracts from the U.S. sanctions list.
Coinbase is the largest U.S. crypto exchange by trading volume and has publicly advocated for crypto reforms in Washington, while dealing with a series of recent SEC probes. The Securities and Exchange Commission recently requested information from Coinbase about the listing of cryptocurrencies that the agency argues may have been unregistered securities. The SEC is also looking into its crypto rewards program, known as staking.
“We have advocated for regulatory reform across Washington and that work will continue,” Grewal said. “We can continue to cooperate and partner with the agencies that are being challenged in this instance, because this is not about questioning anyone’s good faith, but it is about assuring that the rule of law applies.” More

“The German economy is facing a difficult time ahead of us due to the Ukraine conflict, China, supply chain problems and the energy crisis,” Commerzbank CEO Manfred Knof told CNBC on Thursday.
“Probably the German economy is going into a downward [trajectory] and maybe into a recession but the good news is there no reason to panic,” he added.
Fears of a recession have been exacerbated amid the possibility of a winter gas shortage in Europe.

The chief executive of one of Germany’s biggest banks, Commerzbank, sought to reassure investors Thursday about the prospect of non-performing loans this winter, saying banks are far better placed to cope compared to previous crises.
“The German economy is facing a difficult time ahead of us due to the Ukraine conflict, China, supply chain problems and the energy crisis,” Commerzbank CEO Manfred Knof told CNBC’s Annette Weisbach at a Handelsblatt conference in Frankfurt, Germany.

“Probably the German economy is going into a downward [trajectory] and maybe into a recession but the good news is there no reason to panic.”
Asked whether he expected non-performing loans to rise substantially over the course of the winter, Knof replied: “If a recession will be there then it is likely we will see something, but the situation is significantly better than in the past.”

Commerzbank reported a net second-quarter loss due to restructing costs and an exceptional write-off to an outsourcing project.
Picture Alliance | Picture Alliance | Getty Images

“Banks have done their homework, we are all capable, we have enough buffer to help our customers during this crisis and this is really what counts,” Knof said. “Therefore, we are concerned but we are not worried and there is no reason to panic.”
Fears of a recession have been exacerbated amid the possibility of a winter gas shortage in Europe. Lawmakers across the region are scrambling to fill underground storage facilities with gas supplies in order to have enough fuel to keep homes warm during the colder months.
Russia — traditionally Europe’s largest energy supplier — completely halted gas flows via the Nord Stream 1 pipeline earlier this month. The pipeline is Europe’s major supply route and connects Russia to Germany via the Baltic Sea. State-owned energy giant Gazprom cited technical issues for the halt to supplies, while the Kremlin has since said it will not turn the taps back on until punitive sanctions are lifted.

Germany ‘satisfied’ with Commerzbank development

Earlier on Thursday, German Finance Minister Christian Lindner sought to downplay speculation about the government’s more-than-15% stake in Commerzbank.
Speaking at the Handelsblatt conference, Linder said Olaf Scholz’s administration was “very satisfied with the development of Commerzbank,” Reuters reported.
Last month, Germany’s second-largest lender reported a net second-quarter loss due to restricting costs and an exceptional write-off to an outsourcing project.
Shares of Commerzbank rose 1.7% on Thursday morning. The Frankfurt-listed stock price is up around 4% year-to-date.
— CNBC’s Silvia Amaro contributed to this report.

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Airline tickets with a layover are 20% cheaper, on average, than nonstop flights, according to a Google Flights analysis of historical data.
However, flight cancellations and delays have increased this year. That can have cascading effects on other aspects of a trip with multiple stops.
Travel experts share tips on nonstop flights versus layovers, and other advice to save money on your next trip.

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There’s a surefire way to save money on plane tickets — but those savings may not be worth it for some travelers, depending on their tolerance for certain headaches.
The money-saving strategy likely doesn’t come as a surprise: Booking a flight with one or multiple stops is generally less expensive than choosing a non-stop option. The average discount for doing so can be substantial, around 20%, according to Google Flights data on domestic flights for the past five years.

Round-trip domestic flights cost $293 in August, on average, according to Hopper. A 20% discount on that average fare amounts to roughly $59.
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The Google analysis calls the willingness to take a layover “one of your best bets to save money when you fly.”
“That’s largely because there are just more ways to get from Point A to Point B with a stop in between,” according to James Byers, group product manager for Google Flights.

‘Reduce variables’ to limit layover woes

Chaiwiwat Duangjinda / Eyeem | Eyeem | Getty Images

Travelers may feel the impulse or have the need to trim travel budgets as airfare and other trip costs have become more expensive. Costs for airfare, hotels and rental cars fell in July relative to a year earlier, but are still up compared to pre-pandemic levels — by double-digit percentages, in some cases, according to federal data.

Searches for “cheapest airline tickets” swelled by 240% in the U.S. between April and August this year relative to the prior four-month period, from November 2021 to March 2022, according to Google.
But the savings travelers get from layovers come with tradeoffs — ones travelers may feel more acutely as airlines continue to struggle with potential consumer annoyances like flight and baggage delays, according to travel experts.

There’s the obvious time differential — it takes longer to travel with stops than without. But travel delays and cancellations can have cascading effects that impact the remaining legs of your trip.
For one, you may miss a connecting flight if your first is delayed. Even if you arrive on time for a connecting flight, your bag may not if the layover is too short.
Of course, travelers may not have the option to choose a nonstop flight, especially if they don’t live near a major airport. Those with the option (and the budget) to fly nonstop may find it’s worth the extra cash. Those without the option can potentially reduce their number of layovers during a trip — perhaps one instead of two, for example.
“You want to reduce variables as much as possible when you travel,” according to Sara Rathner, a travel expert at NerdWallet.

‘Err on the side of more time, always’

D3sign | Moment | Getty Images

About 73% of flights arrived on time in June this year — fewer than the nearly 75% in June 2021, though about equal to the pre-pandemic rate in June 2019, according to most recent Department of Transportation data.
More flights have been cancelled, too — 3.1% of flights in June 2022, which is double the rate during the same time last year and up from 2.1% in 2019, according to agency data.
Airlines mishandled a larger share of bags from January to June 2022 than in recent years, too. More than 1.4 million bags — 0.63% of the total — were mishandled during that period, versus 709,700 (0.44% of all bags) in 2021 and 1.5 million (0.61%) in 2019. Mishandled bags include those that are lost or delayed.

Lines are long and airports are still understaffed, so you don’t want to waltz into the airport with 20 minutes to go.

Sara Rathner
travel expert at NerdWallet

“Err on the side of more time, always,” Rathner said. “Lines are long and airports are still understaffed, so you don’t want to waltz into the airport with 20 minutes to go.”
For travelers choosing a flight with one or more stops, she recommends looking for layovers of 90 minutes or more for U.S. flights to provide an adequate buffer.
Those with a layover can also eliminate the risk of a lost or delayed bag by packing light and carrying belongings onto the airplane rather than checking them, she said.

5 more tips for cheaper airfare and travel

There are ways travelers can potentially reduce their costs for plane tickets — and for a trip, more broadly — aside from choosing a layover. Some may run counter to popular belief.

Be flexible with when you fly: Flying domestically on a Monday, Tuesday or Wednesday yields a 20% discount relative to a weekend departure, on average, according to Google’s analysis of historical data. The discount is 12% when considering both international and U.S. flights. Additionally, those with flexibility to travel during the offseason between Labor Day and year-end holidays will generally get discounts relative to peak travel times, Rathner said. Domestic airfare in September and October is down 37% compared to the peak summer season, for example, according to Hopper.
And where you fly from: Consider all nearby airports, not just the one closest to you. It may be cheaper to drive to an airport farther from home and fly in and out from there, compared to your home airport, according to Phil Dengler, a travel expert at The Vacationer.
Shop early: Waiting for a particular day of the week to book a flight doesn’t offer much of a financial benefit — travelers have gotten a paltry 1.9% discount, on average, by shopping on a Tuesday, Wednesday, or Thursday instead of the weekend, according to Google. Buying well in advance has a “much bigger influence” on cost than waiting for a Tuesday, Byers said. Domestic flights are cheapest about a month and a half before departure, though may vary based on the specific route, Google found.
Set price alerts: Experts recommend using services that help consumers track cheap airfare and send price alerts to travelers. Examples include The Fare Deal Alert, The Flight Deal, Google Flights, KAYAK Price Alerts, Scott’s Cheap Flights and Secret Flying, according to Rathner. “It can be useful to use the technology that exists to save you from yourself,” she said.
Book your trip backwards: Flights are often the first thing people consider and book when planning a trip. But plane tickets may not be the most expensive component. Optimizing the price of a rental car by searching for the lowest-cost combination of days, and then buying plane tickets to match that itinerary, may help save money on the overall trip even if it means paying a little more for airfare, Rathner said.

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GameStop — GameStop surged 9.2% before the bell despite sharing a widening quarterly loss and declining sales. The video game retailer also announced a partnership with crypto exchange FTX. GameStop’s results could not be compared since few analysts cover the company.
Asana — Asana’s stock surged 19% in the premarket following a beat on the top and bottom lines for the previous quarter. The communications software company shared a smaller-than-expected loss of 34 cents per share on revenue of $134.9 million. Revenue guidance for the current quarter also came in ahead of Wall Street’s expectations.

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American Eagle Outfitters — The retailer’s stock sank 14.5% in premarket trading after earnings per share for the quarter fell 9 cents short of expectations, according to analysts surveyed by Refinitiv. American Eagle Outfitters also said it expects higher markdowns and increased promotions given the current retail environment.
Dave & Buster’s — Shares of Dave & Buster’s rose 3.5% after the company posted a better-than-expected quarterly revenue. The company’s top line came in at $468.4 million, topping a StreetAccount forecast of $432.9 million. Comparable store sales also beat expectations for Dave & Buster’s.
First Solar — Shares of First Solar rose 4.4% after Goldman Sachs double-upgraded the solar technology stock to buy and said the company is an immediate beneficiary of the Inflation Reduction Act.
Frontier Group — Shares of the discount airline fell 2.9% amid a downgrade to market perform from outperform by Raymond James. Shares of Allegiant Travel rose on the back of an upgrade to outperform in the same note.
Moderna — Moderna’s stock gained 1.8% after Deutsche Bank upgraded the stock to a buy rating, citing revision to estimates following strong quarterly results.

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Here are a few familiar descriptions of the dollar: “the cleanest shirt in the laundry basket”, “the least-ugly mug in a beauty contest”, “the one-eyed man in the kingdom of the blind”. Nobody, it seems, loves the dollar; they just really dislike the alternatives. And that aversion is only growing. The dxy, an index of the dollar against half a dozen major currencies, is at a 20-year high (see chart 1). Among the dirtiest of the dirty linen are sterling, the euro and the yen (see chart 2). Every fresh lurch upwards prompts some big questions. First, what is driving it? Much of the recent rise reflects differences in monetary policy. At the turn of the year, the Federal Reserve became more determined to tackle inflation. A series of interest-rate increases since then, with more expected, has turned the dollar into a high-yielding currency. Lofty interest rates are a draw to global capital, which in turn has pushed up the dollar. The dollar is also a refuge in troubled times. Scared investors tend to reach for the currency. And high oil and gas prices are generally bad for energy importers, such as Europe, but good for energy exporters, such as America. The handful of currencies that have kept pace with or beaten the dollar this year tend to be those of energy-producing countries. In short, the dollar is the go-to currency largely because America has proved a reliable source of economic growth. That is particularly true now. Europe is edging closer to recession. The closely watched purchasing-managers’ index suggests the euro-zone economy shrank in August. Less noticed is that Asia is also losing steam. Sluggish export growth is the latest worry for China’s economy, the vitality of which has been sapped by a property hangover and the country’s zero-covid policy. China’s weakness is apparent across Asia. Industrial output fell sharply in South Korea, Taiwan and Japan in July. Export orders have slumped. High energy costs have not helped. The currencies of these countries have wilted against the dollar. In Japan, where the central bank has stuck with ultra-low interest rates, the authorities have hinted that they may intervene to halt the yen’s slide. In China there has been renewed action to support the yuan. So is the dollar now a problem? In principle, its strength is a remedy for unbalanced global growth, since it gives European and Asian exporters an edge over domestic producers in the stronger American market. In practice, a strong dollar makes matters worse. It squeezes global credit, because countries and companies beyond America’s borders borrow in dollars. So when the dollar rises, it becomes more expensive to pay back debts out of local-currency revenues. For many emerging-market economies, the higher cost of dollar borrowing trumps the boost to exports they get from a weaker currency. Dollar strength may not even be a boon for rich countries, says Steve Englander of Standard Chartered, a bank. Exporters in Europe are hamstrung by energy disruptions, so cannot take full competitive advantage of a favourable exchange rate. Will the dollar ever weaken? For that three conditions need to be met. First, the global growth gap has to narrow. A hard landing in America won’t do the trick. A synchronised downturn in all regions of the world would only spark a run to the safety of the dollar (although the beleaguered yen might finally catch a bid). What is needed is for growth prospects outside America to improve. A second condition is a rapid reduction in price and wage pressures in America. This would allow the Fed to ease off the monetary brake, withdrawing some yield support from the dollar. The third condition is related to the first two: a weaker dollar requires some kind of good news on global energy. Absent that, it is hard to see Europe closing the growth gap with America. None of these conditions seems likely to be met soon. Until they are, the dollar will stay mighty—but only because the yen, the euro and the rest are so puny. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More